The stock (ticker: LHA.Germany) can climb about 20% in the next 12 months, if the company maintains its discipline in what remains a difficult environment for European carriers. Right now, management's commitment looks assured.

Lufthansa's Frankfurt-listed shares, which closed Friday at 16.16 euros ($21.11), have jumped more than 50% in the past year, putting them among the top performers in Germany's benchmark DAX index. However, they still trade at only 13 times forecast 2013 earnings of €1.23 per share and just nine times projected 2014 earnings of €1.79. In contrast, British Airways owner
International Consolidated Airlines GroupIAG.ln -3.1358885017421603%International Consolidated Airlines Group S.A.U.K.: LondonGBP556
-18-3.1358885017421603%
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19.793520825916698Market Cap
11703535223.3229
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N/ARev. per Employee
266711More quote details and news »IAG.lninYour ValueYour ChangeShort position
(IAG.U.K.) trades at a lofty 2013 multiple of more than 28 times, and
Air France-KLMAF.fr 0.44674019265670806%Air France-KLMFrance: ParisEUR7.195
0.0320.44674019265670806%
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(AF.France) is expected to have a loss this year.

Lufthansa offers investors a bit more comfort on other metrics, too. The German airline, which has a market value nearing €7.5 billion, trades at an attractive 0.9 times book value, compared with 1.3 times for IAG and 0.5 times for struggling Air France. It also has American depositary receipts (DLAKY) that trade in New York.

John Chisholm, chief investment officer at Acadian Asset Management in Boston, says the short-term outlook for the company seems negative, but he is bullish on the carrier's longer-term prospects. "In addition to the value story, we expect Lufthansa to surprise on the upside due to significant margin improvements over the next few years," he says.

One cause for optimism at Lufthansa, which owns Swiss and Austrian Airlines, as well as low-cost carrier Germanwings, is a plan for restructuring that's intended to contribute €1.5 billion to operating performance by 2015. That figure could be conservative. Management is determined to meet that goal: It already has sold loss-making carrier BMI to IAG and cut jobs, sparking clashes with unions.

It is making a concerted effort to control costs, although there is little it can do about the rising price of fuel. Lufthansa's fuel bill rose €1.1 billion in 2012, to €7.4 billion, or 20% of its operating cost. Saving fuel has a major impact on profitability: A 1% reduction in consumption will add about €74 million to operating profits. Higher fuel costs were a head wind for the company last year, but its profit margin advanced to 10.9% from 8.9% in 2011. Earnings before interest, taxes, depreciation, and amortization grew 28%, year on year, to €3.27 billion, as revenue edged ahead 4.9%, to €30.14 billion.

The airline isn't paying a dividend, however. Late last month, Lufthansa told shareholders that it planned to scrap the payout, so it could invest more cash in its business. It paid out €114.5 million in 2011. The move will help Lufthansa protect its investment-grade credit rating, a rarity in its industry. Shareholders have been sympathetic, and the stock has climbed since the announcement.

Part of the money will be used to fund the purchase of new, fuel-efficient planes, which will help Lufthansa deal better with fuel costs. The carrier already has a fleet loaded with the world's most modern aircraft.

If Europe's carriers can maintain their pricing discipline and energy costs don't experience dramatic increases, Lufthansa represents a "cheap opportunity," says Acadian's Chisholm, who reckons the carrier is more attractive than the majority of European companies right now. Analysts at Credit Suisse rate Lufthansa at Outperform with a €19.60 price target, which suggests upside of more than 20%.

On that assumption, Lufthansa can give shareholders a ticket to first-class returns.

The retailer this month announced good results for 2012, although the improvement was largely due to one-off gains from disposals of assets in Asia and Latin America. Sales in those regions are growing, but Carrefour still derives about two-thirds of its sales in Europe.

Sales in France last year edged up 0.5%. That's evidence that management's strategy to revive the retailer in its home market is bearing fruit, although it will take time to ripen. The rest of Europe declined 2.7%. An investment in Carrefour now is a bet that Plassat can continue to make inroads at home while cutting costs and improving his company's fortunes in troubled markets like Spain and Italy.